Coles Liquor has reported 2.3 per cent growth in sales revenue, normalised at 0.5 per cent, saying its sales growth was impacted by a challenging liquor market as economic pressures saw customers reduced discretionary spending.
The group also said the transition away from less profitable bulk sales and adjusting its promotional mix across third party eCommerce channels throughout the year impacted sales growth.
In releasing its results for the 2024 financial year, Coles said its liquor sales were particularly subdued in the second half of the year, although trajectory improved throughout the period with sales revenue declining by 0.4 per cent on a normalised basis in the fourth quarter compared to a decline of 1.9 per cent in the third quarter.
Digital platforms and eCommerce sales revenue was strong for the liquor division, increasing by 9.2 per cent (normalised), this strong growth was underpinned by on-demand delivery which was expanded to include Menulog in over 400 stores, in addition to DoorDash and Uber Eats, already in more than 600 stores.
In addition the group added 244 new lines to its exclusive liquor brands portfolio, particularly in its key growth categories including craft beer and Ready-to-Drink, and offering value across all price points.
Overall sales revenue increased from $3.6bn in FY23 to $3.7bn in FY24, a 52-week year and 53-week year respectively, while reported EBITDA fell from $279m to $261m.
Speaking about the overall group’s performance, CEO Leah Weckert said: “The financial pressures on households and families have been front of mind for us this year and we have endeavoured to deliver value across our supermarket, liquor and online offerings to help customers balance the household budget.
“At the same time, we have worked hard to deliver improvements in availability and quality, made significant inroads in addressing loss, accelerated our digital offering, continued to maintain a strong focus on costs and completed the construction of our second ADC and both our CFCs.
“These achievements could not have been possible without the efforts of our more than 115,000 team members, and I thank them for their resilience and dedication in working to deliver for all our stakeholders.”
Looking ahead she added: “As we look ahead, we are well positioned to deliver on our strategic priorities.
“With our Kemps Creek ADC ramping up and our two automated CFCs in the process of transitioning orders from stores, we look forward to unlocking the full benefits of our transformation investments, including delivering further improvements in availability and efficiency through our ADCs and delivering a world-class customer experience for online orders. With ongoing cost-of-living pressures, we will also continue responding to the needs of our customers with a focus on value through every day low prices, promotions, Flybuys and Coles Own Brand.”
In the first eight weeks of FY25 Coles said its liquor sales revenue has declined by 1.4 per cent, impacted by the CrowdStrike outage in July and the continued move away from bulk sales.
The group said: “Our focus remains on providing value to customers as well as delivering growth from the recently acquired Tasmanian liquor stores and ensuring our cost base is aligned to the current market environment.”
Over the course of FY24 there were 97 store renewals completed, 45 new stores opened and 10stores closed across the Liquorland, Vintage Cellars and First Choice banners. This included successfully completing the acquisition of 20 stores in Tasmania. At the end of the period the portfolio comprised 992 stores.
